The Indian mobile telecom industry has shown immense growth. As of March 2012, it reported 919.7 million mobile subscribers. The total urban mobile subscriber base stands at 596 million, while there are 323 million rural mobile subscribers in the country. However, the mobile telecom industry is challenged by decreasing Average Revenue Per User (ARPU) given the huge subscriber base but high expected future adoption rate of MVAS could help in increasing the ARPU. A varied demographic distribution, changing lifestyles and shift in consumer preferences amongst rural, urban, and sub-urban consumers, add further fillip to valued added services, which can yield high returns if implemented strategically. The Indian telecom industry is all set to register high growth rates with assorted MVAS products targeting particular segments of customers in variable price ranges.

The Indian MVAS industry reported unprecedented annual growth of 36 percent to reach USD 3,533 million in 2011. We estimate that the industry will touch USD 7,106 million by 2016, registering a year-on-year growth rate of 15 percent. Already a significant rise in disposable incomes has drastically changed the consumers’ spending pattern with regard to mobile devices and value added services. This has been the major reason for the high adoption rate of Smartphones, loaded with a variety of applications, especially among urban users.

The MVAS market has been broadly classified into four segments in this report, information services, communication services, M-commerce and entertainment related MVAS. M-commerce and value added entertainment services will be the primary growth drivers accounting for the highest adoption rate among mobile users in the near future. Further, the growth potential of the different MVAS segments will not only be confined to urban areas, but is also expected to register high adoption even in rural parts of the country. Thus, along with the rise in demand from varied mobile value added services in urban India, a considerable rise in mobile subscriber base in rural India promises huge revenue potential for players in the MVAS value chain.